financial focus for women
TRANSCRIPT
FINANCIAL FOCUS FOR WOMEN
Financial Focus for Women was created to meet the
unique needs and goals of women, whether you are
happily married or on your own. Stearns Financial
has been helping clients in this area deal with difficult
challenges and think ahead to solve potential future
problems for over 30 years. Most women will encounter
an average of nine life transitions which will impact
their financial security. These include career decisions,
marriage, motherhood, caring for aging parents,
divorce, widowhood and later stage aging transitions.
At some point in their lives, it’s expected that over
95 percent of all women will be solely responsible
for their family’s assets, controlling an estimated two
thirds of the nation’s wealth within the next 20 years.
It is our mission to inspire and educate women to
take charge of their financial lives and to empower
them in their relationships and in the community.
We believe that a financially confident woman has a
better ability to both survive and prosper in whatever
future transitions she may encounter.
WELCOME TO OUR NEWSLETTERWe are focused on the unique issues and transitions that women face.
We hope you enjoy this issue of Financial Focus for Women and welcome your ideas for future stories!
HIGHLIGHTS of this issue:
• FEMALE ENTREPRENEURS ARE ON THE RISE:
The tipping point has been reached when women finally get the early stage capital, mentoring and respect they deserve. It’s still challenging
to turn a good idea into a business, especially in the second industrial revolution. PAGE 6
• HOW TO CREATE AN ‘ICE’ PLAN:
Do you have a financial In Case of Emergency plan? PAGE 8
• SFG WOMEN IN THE NEWS:
PAGE 8
• BREADWINNER SURVEY: WORKING WOMEN ARE
STRESSED OUT AND READY FOR CHANGE:
Highlights of our study group’s national survey of working women with some ideas for reducing stress. PAGE 2
• A PLANNING GIFT FOR THEIR 18TH BIRTHDAY:
A most unusual gift for your child who is coming of age. PAGE 3
• INTELLIGENT AGING: HOW DO YOU WANT TO BE
REMEMBERED? Interview with Legacy Coach Katrina Solomon on concepts that go beyond typical estate planning. PAGE 4
• STOCK MARKET VOLATILITY: Is stock market volatility causing you to lose sleep? PAGE 5
Think Ahead. Play Smart. SM • A Publication of Stearns Financial Group • SPRING 2016
Pam Stearns
Haleh Moddasser
Sherry McKinney
Libby Stafford
JoyceBlack-Staley
Paula McMillan
Tara Maxwell
Courtney Kidwell
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BREADWINNER SURVEY:
Working Women are Stressed Out and Ready for Change
When it comes to financial matters, women have it all – all of the pressure, that is. And not all that much support or guidance.
The primary breadwinners in 40 percent of American families, women are increasingly moving into the driver’s seat when it comes to family finances. They are accustomed to being the “go-to” person for answers in almost every part of their lives. Forecasting resources needed for college, unforeseen challenges in their business or career, caring for aging parents and retirement needs can be daunting while they juggle everything else in their busy lives. Behind closed doors, these successful women are often quick to admit to feeling under-confident and under-supported in knowing whether they have adequately planned for future needs.
“What Do Breadwinner Women Want?” is a recently released survey of over a thousand successful women conducted by the Family Wealth Advisors Council (FWAC), a nationwide network of leading independent wealth management firms. Dennis Stearns and John Thomas are members of the Family Wealth group. The study revealed key insights into the unique challenges women encounter in juggling career and business issues with family finances.
While both genders often retreat from difficult situations and decisions, failing to devote ample time and energy to planning for the future can create a host of problems, especially for women. Consider these findings that
the family, the majority of women surveyed disclose a different experience. Traditional social beliefs create even more stress for many breadwinner women. Forty percent of respondents surveyed felt pressured socially and by family members to keep their breadwinner status private, while 29 percent went on to say that their parents had expressed negative feelings about them being in the role.
This limited perceived support, along with time and energy demands, often distract women from being tuned into the planning they need as they age and approach retirement. Often disengaged in the conversation until a sudden need arises, such as the death or illness of a spouse, divorce, etc., they find themselves thrust into the middle of major decisions poorly prepared while still trying to keep many plates spinning in their work life.
In contemplating your family’s current and future needs, consider the following ways to take some stress out of the planning:
• Coordinate your personal financial plan and your business plan. Be clear about how to achieve your and your family’s goals without putting yourself into an early grave.
• 46% of women surveyed said “My employer is not supporting my needs in terms of a work-life balance.” In this highly competitive economy, if this sounds like your situation, build time into your busy calendar
highlight why it is paramount to make sure women
are prepared for the future:
• While 80 percent of men die married, the same
percentage of women die single – most often outliving
their spouses.
• Ninety-five percent of women will be their family’s
principal financial decision-maker at some point in
their lives.
• Responsible for more than 75 percent of all financial
planning responsibilities in their households, female
breadwinners spend less than 1/10th as much time
and focus on their own personal financial planning
as they do on their career or business plan.
Surprisingly, instead of being cheered on by their
relatives and others for being the financial leader of
Dozens of articles in national
publications have been sparked by
the study results even though many
of the breadwinner women we know
already understand the frustration
and challenges of having too many
plates spinning at one time.
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BREADWINNER SURVEY:
Working Women are Stressed Out and Ready for ChangeThink Ahead. Play Smart.SM
to recharge your batteries. New studies suggest constant stress and sleep loss are more difficult to reverse effects than previously thought.
• 62% of women in the FWAC study say they are leaving money on the table in terms of getting their financial house in order. If you’re wearing too many financial hats personally and professionally, consider spreading the heavy lifting to others in your inner circle that you trust. Stearns Financial is happy to assist as well with our internal and network resources. Making more but keeping less is not a good recipe for financial independence.
Through prioritizing and delegating, breadwinner women can have it all – the support, the peace of mind and the positive outcomes that come with mapping out a solid, sustainable personal action plan.
Stearns Financial recently hosted a “Secrets of Breadwinner Women” workshop for clients, allied professionals and friends of the firm. It included a fireside chat session featuring two accomplished executive coaches and leadership experts, Drs. Peggy and Gary Bradt, on “Mars vs. Venus: How the Sexes Communicate (or Don’t) at Work and Play."
Want to host a Breadwinner “Secrets” lunch and learn
or workshop at your business or professional group?
Call Libby Stafford at SFG to arrange a private session
on this important topic for women.
As you plan for an 18th birthday celebration, should you consider giving your child a HealthCare Power of Attorney (HCPOA) to sign? This seems like it might qualify as the worst 18th birthday present ever; however, let’s think about why it might not be the worst gift ever.
On your child’s 18th birthday they legally become an “adult.” By your child becoming an “adult,” you are suddenly no longer legally able to make medical decisions for your child. As a parent, I hope to never be in a situation where I need to make a medical decision for my “adult” child. However, the reality is parents are thrown into unfortunate circumstances every day. If your “adult” child is involved in a car accident where they are unable to make their own decisions and a HealthCare Power of Attorney is not in place then you will not be able to make decisions on their behalf. If you prefer to be responsible for your child’s medical decisions in this situation or in any other unfortunate situation then you need to have them sign a HealthCare Power of Attorney. Ask your estate attorney for the form that corresponds to the situation and your state law.
This is like an airbag – you forget you have it until it becomes vitally important to your well-being or those you love. So, maybe this is not the worst 18th birthday present after all.
Tara Maxwell, CFP, MBAis the Senior Planning Specialist for Stearns Financial. She can bereached at 336-230-1811 or [email protected]
A PLANNING GIFT FOR THEIR 18TH BIRTHDAY
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SPECIAL INTERVIEW WITH
Katrina Solomon, Founder of A Personal Legacy
How do you want to be remembered?
Most likely you have worked hard to accumulate your financial, tangible assets – stocks, bonds, real estate, cars, boats, jewelry, art collections – and have decided how you want them to pass on to your heirs. They represent a part of who you are. But do they really express how you want to be remembered?
A Legacy Letter, also called an Ethical Will, shares your values, beliefs, life lessons, hopes – the essence of who you are – with your loved ones and future generations you may never even know. It bequeaths your values instead of your valuables, and is becoming increasingly attractive to today’s “Greatest Generation” and their Baby Boomer children. One of my favorite descriptions of a Legacy Letter is “a love letter from the voice of your heart.”
Often written for a milestone event such as a birth, marriage, graduation, birthday, anniversary, or retirement, a Legacy Letter is a non-binding document that tells “the story behind the story.” It provides an opportunity for you to influence how you want to be remembered. It is both a gift from you and a gift for you.
I recently wrote a Legacy Letter to my 26-year-old daughter. It was a gift for her, of course, but to my surprise it became an even greater gift for me, lifting a burden I did not even realize I was carrying. Life can change on a dime, and I found gentle comfort knowing that if something unexpected were to happen, she would have this timeless keepsake to cherish. My intention is to update or add to the Legacy Letter as our lives change – perhaps her marriage, my next “big” birthday, her first child. Or I might decide to
expand the letter into a memoir-style Reflection Book of stories, anecdotes, and photos.
A Legacy Letter is typically two to ten pages. It can be handwritten, printed at home, or professionally formatted, embellished, and bound. To give you an idea of what a Legacy Letter might sound like, here is an excerpt from my seven-page letter to my daughter.
My Dearest Shira,
I have always been one who has tried to “walk the talk” and my newest venture of helping others create Legacy Letters and Ethical Wills should be no exception. So here is my own Legacy Letter – a short, non-binding document that passes on some of the intangible wealth I have gathered on this journey of mine and now want to pass along to you – thoughts about my values, beliefs, learnings, guiding lights.
My intention is to share these thoughts with you long before you will need to deal with the formal, legal Last Will and Testament that passes on my tangible wealth. I also plan to update this Legacy Letter from time to time, as my life changes and as your life changes. One thing that I know will never change, however, is my enduring love for you Shira, my darling daughter.
In no particular order, here are some “life lessons” from my almost 65 years in this fascinating, confounding, wonderful world we have the privilege of sharing.
1. It is important to have a “happy place” that you can go to in your head when you need solace or comfort or courage. My happy place is on the lake at the summer cottage my parents owned when I was a teenager. I am in the row boat …
Historically, the tradition of the Ethical Will dates back more than 3,000 years to biblical times, when information was passed down orally from father to son. Today, a Legacy Letter or Ethical Will is more often presented during life to act as a conversation starter, a catalyst to articulate words that might otherwise remain unsaid. Your wisdom, faith, beliefs, gratitude, explanations, thoughts, wishes, hopes, and blessings can all find a home in a Legacy Letter. In fact, research shows that humans have an innate desire to share wisdom and create generational connections, and that understanding our stories, values, and passions helps us live our lives with greater purpose and intent.
The Legacy Letter concept is extremely flexible and varied. Not only can you address how you want to be remembered, you can address the “why” behind a wide variety of topics important to you. A couple might write a Legacy Letter explaining the heartfelt ideas and dreams behind establishing a trust or foundation. A single woman might write a Legacy Letter explaining the history and family significance behind treasured pieces she is leaving to nieces and nephews. A grandmother might write a Legacy Letter explaining the origin and experiences behind her favorite recipes. A Legacy Letter might include photos, a recording, or even a video. Truly, the only constraint to a Legacy Letter is the limit of your time and imagination.
Katrina Solomon is a writer and Certified Legacy Navigator® who facilitates workshops and provides individual coaching. To learn more about legacy and Legacy Letters, or to read the entire Legacy Letter excerpted above, visit APersonalLegacy.com.
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Think Ahead. Play Smart.SMKNOWLEDGEABLE InvestorSPECIAL INTERVIEW WITH
Katrina Solomon, Founder of A Personal Legacy
IS MARKET VOLATILITY DERAILING YOUR FINANCIAL FUTURE?BY HALEH MODDASSER, CPA
Today’s volatile market environment has many investors worried about their financial futures, raising questions about whether it’s a good time to get out of the market or a good time to get in. At the root of all the anxiety, however, is one common theme: "Am I going to be okay?"
To answer this question, one must look beyond investment management alone, to the vast array of decisions that will impact your financial future. For example, are you saving enough? Should you pay off your mortgage? Downsize? Fortunately, holistic financial planning, of which investment management is only a part, can help you answer all of these questions while focusing your attention on the long term.
In fact, focusing on short-term market volatility can lead to market "timing" – a strategy that study after study confirms simply does not work. For example, a recent Dalbar study shows that the average investor earned only 2.5% over the last 20 years – by hopping in and out of the market – inadvertently buying "high" and selling "low." Had this same investor simply stayed put, she would have earned an average return of 8.7% per year! This stunning piece of evidence demonstrates that it’s the time in the market, not the timing of the market that actually generates returns.
Ultimately, it is a disciplined, consistent investment approach – one that is particularly well suited to a
woman’s temperament – that leads to successful long-term investing. This is because women are typically more patient, less impulsive and more focused on long-term security than short-term returns. With that said, in today’s volatile environment, the traditional mix of stocks and bonds can be enhanced by the addition of "alternative" investments that are non-correlated with traditional stocks and bonds while providing both income and stability to your portfolio. Alternative investments come in a variety of flavors, with many focused on income producing real estate or mezzanine lending. These vehicles can provide good, tax efficient income and boost returns while also lowering portfolio volatility. Be wary, however, as not all alternatives are created alike. In fact, we reject over 95% of the alternatives investments we review due either to poor risk/reward metrics, inadequate safety protocols, inexperienced managers or fees that are too high.
The overarching lesson here is to take the long view with respect to investment management. Avoid knee-jerk buy/sell reactions that will ultimately result in poor performance. Remember that short-term market volatility is normal in the investment world and will likely have no impact on your long-term financial future, as long as you have an appropriate asset allocation and maintain a disciplined approach to your investment strategy. What will, however, impact your financial future will be all the decisions you make surrounding your earnings, savings
and spending, both before and after retirement. A holistic financial plan, one that incorporates your life goals, will help you not only achieve financial independence, but may also help you identify goals that will add meaning
and purpose to your life.
Haleh (pronounced “Holly”) Moddasser, CPA is an SFG
Senior Vice President and lead
advisor for the Triangle Office
in Chapel Hill, NC. She can be
reached at 919-636-3634 or
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FINANCIAL Smarts
FEMALE ENTREPRENEURS ARE ON THE RISE
Entrepreneurship, starting a business or launching a new idea or unit within an existing organization, has been called the great unlocking of human potential. Small businesses create over two-thirds of the net new jobs in America and increasingly the same is true around the world. Women have not been equal participants in this critical arena, but that is changing. The next Steve Jobs or Richard Branson could be a woman.
Today, women own about 36% of U.S. businesses. Only 10% of the fastest growing private businesses are run by women. Thanks to leadership ability, increasing experience, education, changing cultural values and, study results show, better results by female entrepreneurs, women are well prepared to be equal participants in the next wave of entrepreneurship and innovation.
First Round capital released some startling numbers in July 2015. The venture capital firm reviewed 300 of its companies and found that ones that had at least one female founder (versus an all-male founding team) performed 63% better when it came to building value. The Kauffman Foundation, well known for its in-depth knowledge of start-up America, found that women-led private technology companies had a 35% higher return on investment than male-led ones.
Women are rising in their leadership abilities. Zenger Folkman, a well known leadership consulting firm, asked direct reports, bosses and peers to rate 7,280 leaders on 16 traits critical to growing a successful business from taking initiative to integrity. Women outscored men on 12 of 16 traits and did best on driving results and taking initiative, usually considered male success traits.
Raising capital has been a challenge for female entrepreneurs, partly because 94% of investing partners at venture firms are male. The other challenge is hard wiring in men that makes them respond better to certain stimuli than others – not exactly news to women but a good reminder that it applies to business every bit as much as personal interaction. In a study published last year, researchers asked a mix of men
and women to watch “pitch” videos, where an entrepreneur is trying to convince you they are worthy of investing money for a share of the business. Each pitch video was identical, except one was done by a woman and one was done by a man. 68% said they would invest in the man’s new business while only 32% said they would invest in the woman's new business. Both men and women described the male pitch as more “persuasive,” “fact-based” and “logical.”
Those same gremlins in our brains that cause us to make investing mistakes and financial planning missteps (known as “behavioral finance” ) also create problems in entrepreneurship. The venerable Silicon Valley venture firm Kleiner Perkins has gone so far as ordering up training for the firm in overcoming unconscious bias and is now extending it to its portfolio companies.
Two key elements that female entrepreneurs say have been lacking are a supportive network and good mentorship from other female business owners. Breadwinner issues (see special report on the Breadwinner survey in this FFW edition) play into the cultural trends. The good news is the growing number of successful female entrepreneurs are actively looking for hard working women with a good idea to mentor. Venture funds like Broadway Angels, Aspect Ventures, BBG (Built by Girls), Female Founders Fund and Cowboy Ventures all cater to women with a good idea and a plan.
Ask us for help! Stearns Financial regularly helps existing and new entrepreneurs consider options for their business strategy. SFG has considerable experience in this area and has won numerous awards for being a mentor for entrepreneurs (including Chamber Small Business Advocate), good business practices (including Entrepreneur of the Year and Top 300 businesses of the South) and a good work environment (selected by Schwab as a model firm creating a healthy environment for women to thrive).
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FINANCIAL Smarts Think Ahead. Play Smart.SMIntelligent AGING
KEYS TO LAUNCHING YOUR OWN BUSINESS:
1. Have or develop an idea for making something different or better.
2. Test the idea using the “Lean Start-up Method.” Many books and articles are available on how this approach works which is being embraced by business accelerators and universities around the country.
3. You don’t have to quit your day job or stop raising the kids. Most major communities now have accelerator and incubator programs that can help surround you with the right team, assuming you’ve done your homework and have a good idea.
4. Build a business plan that tells you how much capital, people and other resources you need. Don’t know how? Ask us about resources available.
5. Surround yourself with “been there, done that” advisors in key areas that you need to supplement your own strengths.
6. Just do it! Action dictates success in life.
1. Juggling priorities and multi-tasking becomes innate. Important skills in starting and running a business.
2. Moms know how to manage money and be thrifty. The ultra-hot “lean start-up” business model could have been invented by moms.
3. Moms are natural salespeople and they don’t take no for an answer. Entrepreneurs hear the word no a lot growing a business.
4. We thrive on unpredictability and being ready for “come what may.” Business owners have to adjust and pivot a lot.
5. Moms are natural nurturers and in touch with other people’s feelings. Being able to read people is critical when dealing with customers and employees.
6. Creativity comes with the job. Very useful skill for building a successful business.
7. We lead by example. Moms are used to taking responsibility and being a leader.
8. Moms don’t give up. Resilience and endurance are critical to any entrepreneur. We put up with a lot of doodoo just to enjoy the unexpected moments of building a child from the ground up.
WHY BEING A MOM MAKES MEBETTER AT STARTING A BUSINESS
(adapted from a Washington Post article by Evgeniya Usmanaova)
SKILLS HONED BY MOMS (ADAPTABLE TO STARTING A BUSINESS):
Think Ahead. Play Smart.SM
www.FinancialFocusforWomen.net
www.StearnsFinancial.com
Greensboro Office324 W. Wendover Avenue, Suite 204Greensboro, NC 27408336-230-1811 • 800-881-7374
Durham, Raleigh, Chapel Hill Office1450 Raleigh Road, Suite 105Chapel Hill, NC 27517919-636-3634 • 919-636-3642 (FAX)
IN THE NEWS
Sherry McKinney, MBA, CPA, CFP® spoke at the Insider’s Forum in
Phoenix, Arizona to Financial
Advisors from around the nation
on creating a back up plan of
financial records and information
in case of emergency. Sherry has
also presented similar seminars
at River Landing in High Point and Abbotswood
in Greensboro. Sherry presented this topic to the
Southwest and Sedgefield Women’s Clubs along
with an estate planning attorney, elderlaw attorney
and funeral home specialist who provided a broader
view into emergency and end of life planning.
If you have a group that would like to hear either of
these presentations, please let us know by contacting
Sarah McClintock at 336-230-1811 or by email:
Have you ever considered what it would be like if someone suddenly had to take over your financial life because you were unable to do so? That is the center point of the talk that I had with financial advisors from around the nation in Phoenix at the prestigious Insider’s Forum. What would happen to your finances In Case of Emergency (ICE)?
As a financial advisor, I have seen situations where it would have been extremely helpful for a client or their parents to have put together, in one place, a resource that could be used if an emergency arose. From a personal perspective as a daughter and daughter-in-law, I have been the go-to person as my dad’s power of attorney, executor of his will and trustee of his trust. He had organized his records so that my role in taking care of his financial life was made easy. However, when my in-laws house caught on fire and my father-in-law was unable to escape, we were left with disarray, some of
which related to the fire but some of which related to records we did not have.
So, how can you provide peace of mind to your children or the person who will care for you someday? The answer is by giving them the information that they need to make the hand-off a smooth transition. Having spent numerous hours reviewing books and binders that have been developed for this very purpose, the standout was The Everything Binder which can be purchased on Amazon for around $40. This binder allows you to include every detail that someone might need, is organized logically, and comes with a CD that has a fillable PDF if you prefer an electronic version. Don’t let the process overwhelm you, just approach it like eating an elephant, one bite at a time.
For a detailed checklist of items, please contact
Sarah McClintock at 336-230-1811 or by email:
HOW TO CREATE AN ‘ICE’ PLANBY SHERRY MCKINNEY, MBA, CPA, CFP®
MONEY SCRIPTS:
INTERVIEW WITH
Pam is an SFG Senior Financial Advisor
and strategist helping women achieve
their most important life goals despite
all the obstacles they face along the way.
She was a top corporate executive for
over 20 years and “re-invented” both her
professional and personal life.
She is a Certified Public Accountant and has
her undergraduate business degree from
UCLA and MBA from UC-Irvine.
(continued on reverse side)
MONEY SCRIPTS:
Want to learn more?
Read Rick Kahler’s book, Unconscious Finance.
Pam and other SFG team members are available to present to small or large groups
or lead local workshops on Money Scripts.
Contact Libby Stafford at [email protected] or 800-881-7374
for more information.